HomeMy WebLinkAboutPINNACLE PUBLIC FINANCE - CONTRACT - RFP - 8345 LEASE PURCHASE FINANCING 2016MASTER LEASE-PURCHASE AGREEMENT
THIS MASTER LEASE-PURCHASE AGREEMENT ("Agreement") between PINNACLE PUBLIC
FINANCE INC. ("Lessor") and THE CITY OF FORT COLLINS, COLORADO, municipal
corporation ("Lessee") dated February 1, 2017 (the “Effective Date”), is as follows:
ARTICLE I -- LEASE OF EQUIPMENT
1.1 Agreement to Lease
Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
(the "Equipment") as more fully described in each Schedule of Equipment (Exhibit A),
which together with a Payment Schedule (Exhibit B) shall constitute a “Schedule,” subject
to the terms and conditions of and for the purposes set forth in each Lease. Each
Schedule and the terms and provisions of this Agreement (which includes all exhibits
hereto, together with any amendments and modifications pursuant thereto) which are
incorporated by reference into such Schedule shall constitute a separate and independent
lease-purchase of the Equipment therein described and are referred to herein as a
“Lease”. Lessor, after having received all required documentation, shall, no later than two
(2) business days thereafter, unless otherwise directed by Lessee, deposit into escrow the
amount listed as the Total Lease Financing on the applicable Exhibit A, to be used by
Lessee for the acquisition of the Equipment according to the terms of the “Escrow
Agreement and Instructions” attached as Exhibit D (“Escrow Agreement”).
Nothing herein shall be construed to obligate the Lessor to enter into any Lease not
currently in existence, and Lessor shall approve each proposed Lease in its sole
discretion. Such approval shall not be unreasonably withheld.
Further, nothing herein shall be construed to obligate Lessee to enter into any lease not
currently in existence. Lessor acknowledges and agrees that Lessee may enter into a
lease-purchase arrangement at any time with any other party, and such agreement shall
have no bearing on this Agreement.
1.2 Title
During the term of each Lease, title to the Equipment will be in Lessor subject to the
transfer to Lessee upon Lessee’s purchase of the Equipment as provided herein. Upon
the termination of the Lease for any reason other than Lessee’s purchase of the
Equipment, title to any Equipment not purchased by Lessee at the time of termination shall
remain in Lessor. Lessor at all times with reasonable written notice will have access to the
Equipment for the purpose of inspection. Notwithstanding that Lessor holds naked legal
title under each Lease until title has fully vested in Lessee, as provided in Article V. of this
Agreement, Lessee and Lessor agree Lessee shall be the owner of the Equipment for
federal tax purposes and that during the Lease Term, Lessee shall have all the beneficial
and equitable rights of ownership and the associated obligations and liabilities including
but not limited to insurance, taxes, and maintenance associated with the Equipment.
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Lessee and Lessor further agree that Lessee shall be listed as “Owner” on the vehicle
titles and shall be treated as the owner for all the purposes stated herein. It will not be
necessary for Lessor to be listed as lienholder on vehicle titles. Upon the payment of all
rent payable pursuant to Section 4.1 for the original term and all renewal terms, or
exercise of the option to purchase as specified herein, Lessor shall immediately transfer
title to any Equipment so purchased to Lessee, and Lessor’s interest in such Equipment
shall terminate. Following a non-appropriation of funds by Lessee or an event of default
by the Lessee under any Lease, the Lessee will, at the Lessee’s expense, execute and
deliver such additional instruments, certificates or documents, and will take all such
actions as the Lessor may reasonably request for the purposes of implementing or
effectuating the provisions of such Lease with respect to title in the Equipment vesting in
Lessor or for the purpose of more fully completing, perfecting, continuing, preserving or
renewing the rights of the Lessor with respect to the Equipment.
1.3 Lease Not a Pledge of City's Revenues
Nothing contained in a Lease shall constitute a pledge of the general tax revenues, funds
or monies of Lessee except amounts appropriated for the purpose of making Lease
payments during the Lessee’s current fiscal year.
1.4 Title to Leased Motor Vehicles.
Notwithstanding the provision in Section 1.2 of this Agreement that the titles of the motor
vehicles leased by the Lessee under this Agreement will list the Lessee as the owner, the
Lessee and Lessor acknowledge that naked legal title of each such motor vehicle shall
remain in the Lessor unless and until the Lessee exercises its option to purchase the
motor vehicles in accordance with Article V of this Agreement. To further clarify that this is
the intent of the Parties, the Lessee agrees to promptly deposit with First National Wealth
Management, a division of First National Bank of Omaha, the “Escrow Agent” identified in
the Escrow Agreement (“Escrow Agent”), the original of all of the State of Colorado motor
vehicle certificates of title the Lessee receives in the future for motor vehicles it hereafter
leases under this Agreement. Lessor and Lessee shall also enter into the “Escrow
Agreement for Motor Vehicle Certificates of Title” attached as Exhibit “E” with the Escrow
Agent which instructs the Escrow Agent to safely keep and maintain all of the motor
vehicle certificates of title delivered into its possession (“Title Escrow Agreement”). The
Title Escrow Agreement also provides the following: (1) in the event the Lessee notifies
the Lessor under Section 3.2 of this Agreement of a non-appropriation by the Governing
Body of the funds needed for any or all of the motor vehicles leased under the Agreement,
that the Escrow Agent shall have the Lessee’s power-of-attorney to execute on behalf of
the Lessee the assignments of title for each of the certificates of title of the motor vehicles
leased hereunder for which funds have not been so appropriated; or (2) in the event that
the Lessee has exercised its option to purchase any or all of the motor vehicles leased
under this Agreement, the Escrow Agent shall return the original certificates of title for
those motor vehicles to the Lessee and the Lessee’s original power of attorney for each
such motor vehicle. Lessee agrees to be responsible for all costs incurred with the Escrow
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Agent with respect to the Title Escrow Agreement.
ARTICLE II -- DEFINITIONS
When used in this Agreement, the following words and terms shall have the meanings indicated
below unless the context clearly requires otherwise:
2.1 “Agreement Term” or “Term of this Agreement” means the period from the Effective Date
until this Agreement is terminated as provided in Section 3.1 below.
2.2 “Commencement Date” for each Lease means the date interest commences to accrue
under such Lease which shall be the earlier of (i) the date on which the Equipment listed in
such Lease is accepted by Lessee in the manner described in Section 9.4; or (ii) the date
on which sufficient monies to purchase the Equipment listed in such Lease are deposited
for that purpose with the Escrow Agent.
2.3 "Equipment" means all or any of the property described in Exhibit A which Lessor is
leasing to Lessee.
2.4 "Funds" means funds of Lessee legally available and which have been properly
appropriated.
2.5 "Governing Body" means the Fort Collins, Colorado City Council or any successor
governing body of Lessee.
2.6 "Lease Term" or “Term of a Lease” means the period commencing on the Commencement
Date of each Lease and continuing as provided in the applicable Exhibit B, unless sooner
terminated as provided for in Section 3.2 or 3.3 hereof.
2.7 "Lessee" means the City of Fort Collins, Colorado, a home rule municipality and body
corporate and politic existing under the Laws of the State of Colorado which is leasing the
Equipment from Lessor.
2.8 "Lessor" means PINNACLE PUBLIC FINANCE INC., which is leasing the Equipment to
Lessee, and includes Lessor’s assigns.
2.9 "Vendor" means the manufacturers of the Equipment (or the manufacturers' agent or
dealer) from whom Lessee purchased or is purchasing the Equipment.
ARTICLE III -- TERM
3.1 Agreement Term
The Term of this Agreement commences upon the Effective Date and shall continue until
January 31, 2022, unless sooner terminated as provided elsewhere herein.
Notwithstanding the foregoing, with respect to any Lease entered into during the Term of
this Agreement, this Agreement shall continue in effect with respect to that Lease until it
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terminates as provided herein.
3.2 Non-appropriation of Funds
Lessee reasonably believes that it will have a need for the Equipment for the duration of
the Lease Term provided under a Lease and that funds will be available and appropriated
to make all payments for the Lease Term provided under the Lease; provided, however,
the availability of funds in future fiscal years is dependent upon appropriation of funds by
the Governing Body, which appropriation is entirely discretionary.
Lessee will seek funding each year as part of its Governing Body’s budget process. If
funds intended for the continued leasing of the Equipment for any ensuing fiscal period are
not appropriated for such purpose, Lessee may terminate the Lease for which funds were
not appropriated at the end of the fiscal period then in effect for such Lease without
penalty.
Lessee will notify Lessor at least thirty (30) days prior to the expiration of the fiscal period if
funds are not available for the payments required under a Lease by reason of non-
appropriation of funds as set forth above. Upon termination of such Lease for non-
appropriation, if Lessee has not exercised the option to purchase under Article V of this
Agreement, Lessor shall be entitled to take possession of the Equipment. Lessee shall
prepare the equipment for pickup by Lessor within a reasonable period of time following
termination.
Lessor and Lessee understand and intend that the obligation of Lessee to pay rent under
the Lease shall constitute only a current expense of Lessee and shall not constitute or give
rise to a general obligation, multiple-fiscal year debt or other indebtedness or financial
obligation of Lessee within the meaning of any constitutional, statutory or Fort Collins
Home Rule Charter provision or limitation, including, without limitation, Article X, Section
20 of the Colorado Constitution, nor a mandatory charge or requirement against Lessee in
any ensuing fiscal year beyond the then current fiscal year.
3.3 Lease Termination
Any Lease will terminate upon the earliest of any of the following events:
(a) A non-appropriation of funds as provided in Section 3.2;
(b) The exercise by Lessee of any option to purchase granted in the Lease
by which Lessee purchases all of the Equipment subject to such Lease;
(c) A default by Lessee and an election by Lessor to terminate such Lease
under Article VIII of this Agreement; or
(d) Upon payment of all payments required to be made by Lessee under the Lease.
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ARTICLE IV -- RENT
4.1 Amount
Lessee will pay Lessor rental payments for the lease of the Equipment on the dates and in
the amounts set forth in the applicable Exhibit B. Lessee shall have no obligation to make
such rent payments from any source other than the Funds.
4.2 Portion of Rent Attributable to Interest
The portion of each rent payment which is paid as and is representative of interest is set
forth in the applicable Exhibit B. The interest rate for each Lease shall be shown on each
Exhibit B.
4.3 Tax Representations
Lessee understands that Lessor intends to exclude the interest component of the rental
payments from Federal gross income pursuant to the Internal Revenue Code of 1986, as
amended (the "Code"). Lessee covenants and agrees on the date hereof and as of the
Commencement Date of each Lease that it will, for each Lease:
(i) use a book entry system to register the owner of each Lease so as to
meet the applicable requirements of Section 149(a)(3) of the Internal
Revenue Code of 1986, as amended;
(ii) timely file a Form 8038-G (or, if the invoice price of the Equipment is less
than $100,000, a Form 8038-GC) with the Internal Revenue Service in
accordance with Section 149(e) of the Code;
(iii) not permit the Equipment to be directly or indirectly used for a private
business use within the meaning of Section 141 of the Code;
(iv) rebate an amount equal to excess earnings on the Escrow fund to the
Federal Government if required by and in accordance with Section 148 (f)
of the Code, and make the annual determinations and maintain the
records required by the regulations applicable thereto;
(v) ensure that the monies deposited by Lessor in Escrow are not invested in
such manner so as to result in the Lease being treated as an "Arbitrage
bond or Federally guaranteed bond" within the meaning of Section 148(a)
or Section 149(b) of the Code respectively; and
(vi) comply with all applicable provisions of Section 103 of the Code.
Lessee acknowledges and agrees that in the event Lessor is to reimburse Lessee under
any Lease for Equipment which was acquired prior to the commencement of such Lease,
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Lessee shall comply with all Internal Revenue Code and Treasury Regulations regarding
reimbursements.
4.4. No Right to Withhold
Notwithstanding any dispute between Lessor and Lessee, or Vendor and Lessee, Lessee
will make all payments of rent when due, without withholding any portion of such rent,
pending final resolution of such dispute by mutual agreement between Lessor and Lessee
or by a court of competent jurisdiction.
ARTICLE V -- OPTION TO PURCHASE EQUIPMENT
5.1 Option to Purchase Price
Lessee may purchase the Equipment from Lessor, after payment of the rental payment
then due, at a price determined by the Principal Balance remaining on Exhibit B, Payment
Schedule. Individual pieces of Equipment may be purchased from Lessor, after payment
of the rental payment then due, at a price determined by the principal balance remaining
on the individual item's amortization schedule, as produced by Lessee personnel. Price
will be agreeable to both parties. In addition, when purchasing individual items, the
Lessee agrees to pay a re-amortization fee of $250.
5.2 Manner of Exercise of Option
To exercise the option granted in Section 5.1, Lessee must deliver to Lessor written notice
of such election, specifying the date of which Equipment is to be purchased, at least thirty
(30) days prior to the purchase date specified in such notice.
5.3 Conditions of Exercise to Option
Lessee may purchase the Equipment pursuant to the option granted by Section 5.1 only if
Lessee has made all rent payments when due (or has remedied any defaults in the
payment of rent, in accordance with the provisions of the Lease) and if all other
representations, covenants, warranties, and obligations of Lessee under the Lease have
been satisfied (or all breaches of the same have been waived by Lessor in writing).
ARTICLE VI -- REPRESENTATIONS, COVENANTS, AND WARRANTIES OF LESSEE
Lessee represents, covenants, and warrants on the date hereof and as of the Commencement
Date of each Lease as follows:
6.1 Status of Lessee
Lessee is a Colorado home rule municipality duly organized and existing under the
Constitution and the laws of the State of Colorado.
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6.2 Authorization to Execute Lease
Lessee is authorized by the Colorado Constitution, laws of the State of Colorado, City
Charter and City Code to enter into the transactions contemplated by this Agreement and
each Lease, including all exhibits hereto and thereto, and to affect all of the Lessee's
obligations under each Lease and all exhibits. The City’s Purchasing Agent is duly
authorized by the City Charter and Code to execute and deliver this Agreement and each
Lease and all exhibits hereto and thereto on behalf of the Lessee. This Agreement and
each Lease and all exhibits hereto and thereto constitutes the valid and binding obligation
of the Lessee enforceable in accordance with their terms.
6.3 Satisfaction of Procedures and Funding Requirements
All procedures, including any legal bidding requirements, have been met by Lessee prior
to the execution of this Agreement and each Lease, and all rent and other payment
obligations will be paid only out of the Funds.
6.4 Preservation of Warranties and Guarantees
Lessee will use and service the Equipment in accordance with the Vendor's instructions
and in such a manner as to preserve all warranties and guarantees with respect to the
Equipment.
6.5 Representations, Covenants, Warranties, and Obligations to be Cumulative
The representations, covenants, warranties and obligations set forth in this Article are in
addition to and are not intended to limit any other representations, covenants, warranties
and obligations set forth in this Agreement or in any Lease.
6.6 Opinion of Lessee's Counsel
The Lessee will provide an opinion of its counsel with respect to the status of the Lessee,
the notice of any pending legal proceedings threatening the enforceability of a Lease, the
compliance with bidding requirements, the enforceability of this Agreement or any Lease
and reasonably related matters.
ARTICLE VII -- REPRESENTATIONS, COVENANTS AND WARRANTIES OF LESSOR
7.1 Enjoyment
During the term of each Lease, Lessor will provide Lessee with quiet use and enjoyment of
the Equipment, without suit, or hindrance from Lessor, except upon default by Lessee as
to such Lease, as set forth in Section 8.1 herein.
7.2 Disclaimer of Warranties and Status of Lessor, Etc
Lessee has selected the Equipment and desires to lease the Equipment for use in the
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performance of its governmental functions. Lessor will not be liable for specific
performance or for damages if the Vendor of the Equipment for any reason fails to fill, or
delays in filling, the order for the Equipment (or similar Equipment) and does not inspect
the Equipment prior to delivery to Lessee. For the purposes of each Lease and of any
purchase of the Equipment affected under any Lease, Lessor expressly disclaims any
warranty with respect to the condition, quality, durability, suitability, or merchantability of
the Equipment in any respect, and any other representation, warranty, or covenant,
express or implied. Lessor will not be liable to Lessee for any liability, loss, or damage
caused or alleged to be caused directly or indirectly, by any inadequacy, deficiency, or
defect in the Equipment, or by use of the Equipment, whatsoever. Lessor assigns to
Lessee, without recourse, for the term of each Lease, all manufacturer warranties and
guarantees, express or implied, pertinent to the Equipment, and Lessor authorizes Lessee
to obtain the customary services furnished in connection with such guarantees and
warranties at Lessee's expense, subject to Lessee's obligation to reassign to Lessor all
such warranties and guarantees upon Lessor’s repossession of the Equipment.
7.3 Authorization to Execute Lease.
This Agreement and each Lease and all exhibits hereto and thereto constitutes the valid
and binding obligation of the Lessee enforceable in accordance with their terms.
ARTICLE VIII -- DEFAULT
8.1 Events of Lessee Default
Lessee will be in default under a Lease upon the happening of any one or more of the
following events:
(a) Lessee fails to make any rent payment or other payment (including,
without limitation, insurance premiums, taxes, utilities, fines, and fees)
when due; or
(b) Lessee fails to satisfy promptly any representation, covenant, warranty, or
other obligation under the Lease; or
(c) Lessee comes within the jurisdiction of any court as debtor under any
bankruptcy, reorganization, or similar law, whether or not such law is in
existence on the date such Lease commences.
8.2 Remedies on Default
To the maximum extent permitted by law, upon any event of default, Lessor may in its sole
discretion pursue any one or more of the following remedies (which will be exercisable
cumulatively and concurrently or separately), provided notice of default is given by Lessor
to Lessee by certified mail and Lessee shall have at least thirty (30) days after receipt of
such notice within which to cure any such default specified in Section 8.1:
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(a) Terminate such Lease, repossess the Equipment subject to the Lease
under default, and lease (free and clear of any interest of Lessee in the
Equipment) all or any portion of the Equipment to such other persons as
Lessor may elect, applying the proceeds of any such lease (after
deducting Lessor's cost of repossessing, repairing, storing, moving, and
leasing the Equipment, including attorney's fees) against any rent unpaid
for the remainder of the original and any renewal terms and any other
amounts owed to Lessor under such Lease at the time of Lessor's
election under this paragraph;
(b) Terminate such Lease, repossess the Equipment subject to the Lease
under default, and sell (free and clear of any interest of Lessee in the
Equipment) all or any portion of the Equipment at any public or private
sale without demand or notice of intention to sell, applying the proceeds
of such sale (after deducting the costs of repossessing, repairing, storing,
moving, and selling the Equipment, including attorneys' fees) against any
rent unpaid for the remainder of the original and any renewal Terms and
any other amounts owed to Lessor under such Lease at the time of
Lessor's election under this paragraph; and
(c) Avail itself of any other remedy at law or equity.
A default as to any one Lease shall in no way affect or impair Lessee’s rights or
obligations as to any other Lease then in effect.
8.3 Default by Lessor
In the event Lessor should fail to perform in any material respect its obligations under this
Agreement or any Lease, Lessor may be declared in default of this Agreement and/or the
subject Lease. To the maximum extent permitted by law upon any event of default, the
Lessee may, in its sole discretion, pursue one or both of the following remedies provided
notice of default is given by Lessee to Lessor by certified mail and provided further that
Lessor shall have at least thirty (30) days after receipt of such notice within which to cure
any such default:
(a) Terminate this Agreement and/or the subject Lease and seek actual
damages; and
(b) Avail itself of any other remedy at law or equity.
A default by Lessor shall in no way affect or impair Lessee’s rights or obligations as
to any other Lease then in effect under this Agreement.
8.4 Interest on Unpaid Rent
In addition to all of the remedies in Section 8.2, Lessee will be liable to the maximum
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extent permitted by law for interest on any unpaid rent or other payment under a Lease at
the rate of eight per cent (8%) per annum.
8.5 Attorneys' Fees
In the event either party to this Agreement should incur attorneys' fees for litigation in
order to enforce this Agreement or any Lease or to protect its rights hereunder, then, in
that event, the prevailing party in any such litigation shall be entitled to reasonable
attorneys' fees and expenses.
ARTICLE IX -- NET LEASE
9.1 Interpretation
Each Lease for all purposes will be treated as a net lease.
9.2 Taxes and Fees
Lessee agrees to pay all license, sales, use, personal property, and other taxes and fees,
together with any penalties, fines, and interest on such taxes and fees imposed or levied
with respect to the Equipment and the ownership, delivery, lease, possession, use,
operation, sale, and other disposition of the Equipment, and upon the rental or earnings
arising from any such disposition, except any Federal or State income taxes payable by
Lessor on such rental or earnings. Lessee may in good faith and by appropriate
proceedings contest any such taxes and fees so long as such proceedings do not involve
any danger of sale, forfeiture, or loss of the Equipment or of any interest in the Equipment.
9.3 Permits
Lessee will provide all permits and licenses necessary for the installation, operation, and
use of the Equipment. Lessee will comply with all laws, rules, regulations, and ordinances
applicable to the installation, use, possession, and operation of the Equipment. If
compliance with any law, rule, regulation, ordinance, permit, or license requires changes
or additions to be made to the Equipment, such changes or additions will be made by
Lessee at its own expense.
9.4 Certificate of Acceptance/Inspection by Lessee
Lessee agrees to furnish a Certificate of Acceptance in a form similar to attached Exhibit C
when requesting disbursement of funds from the Escrow Account. After execution and
delivery by Lessee of the Certificate of Acceptance, it shall be conclusively presumed that
Lessee is satisfied with and has accepted the Equipment as being in good condition and
repair.
ARTICLE X -- USE, REPAIRS, ALTERATIONS, AND LIENS
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10.1 Use
Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, in
violation of any applicable law, or in a manner contrary to that contemplated by the Lease.
Lessee agrees that the Equipment is and at all times will remain personal property
notwithstanding that the Equipment or any part of the Equipment may now or hereafter
become affixed in any manner to real property or to any building on real property.
10.2 Repairs
Lessee, at its own cost will service, repair, and maintain the Equipment so as to keep the
Equipment in good condition, repair, appearance, and working order, ordinary wear and
tear excepted. At its own cost, Lessee will replace any and all parts and devices which
may from time to time become worn out, lost, stolen, destroyed, damaged beyond repair,
or rendered unfit for use or any reason whatsoever. All such replacement parts,
mechanisms, and devices will be free and clear of all liens, encumbrances, and rights of
others, and immediately will become a part of the Equipment and will be covered by the
Lease.
10.3 Alterations
Lessee may install such miscellaneous equipment as may be necessary for use of the
Equipment for its intended purposes so long as either:
(a) The installation of such equipment does not alter the function or manner
of operation of the Equipment, or
(b) Lessee, upon termination of the Lease, restores the Equipment to its
function and manner of operation prior to the installation of such
miscellaneous equipment.
Subject to the obligations described above, Lessee may remove such miscellaneous
equipment upon termination of the Lease, if the removal of such miscellaneous equipment
will not damage the Equipment. Without the prior written consent of Lessor, Lessee will
not make any other alterations, changes, modifications, additions, or improvements to the
Equipment as described in Section 10.2. Modifications, additions, and improvements
made to the Equipment, other than miscellaneous equipment installed as set forth above,
immediately will become a part of the Equipment and will be covered by the Lease to the
same extent as the Equipment originally covered by the Lease. No such alterations,
changes, modifications, additions and improvements may impair or reduce the value of the
Equipment.
10.4 Liens
Lessee and Lessor will not directly or indirectly create, incur, assume, or suffer to exist any
mortgage, pledge, lien, charge, encumbrance, or claim on or with respect to the
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Equipment or any interest in the Equipment. Lessee and Lessor, promptly and at its own
expense, will take such action as may be necessary to duly discharge any mortgage,
pledge, lien, charge, encumbrance, or claim caused by Lessee or Lessor, respectively, if
the same rises at any.
ARTICLE XI -- INDEMNIFICATION, INSURANCE, AND DAMAGE
TO OR DESTRUCTION OF THE EQUIPMENT
11.1 Indemnification
Lessor assumes no liability for any damages of any nature which in any way relate to or
rise out of delivery, lease, possession, use, operation, condition, sale or other disposition
of the Equipment. To the extent permitted by law, Lessee hereby assumes and agrees to
indemnify, protect, save and keep harmless Lessor, its agents and employees from the
against any and all losses, damages, injuries, claims, demands and expenses, including
legal expenses, of whatsoever kind and nature, arising on account of the negligent act or
omission of the Lessee, its officers, employees or agents in:
(1) the ordering, acquisition, delivery, installation or rejection of the
Equipment;
(2) the possession, maintenance, use, condition (including, without limitation,
latent and other defects whether or not discoverable by Lessor or Lessee,
any claim in tort, including actions for strict liability, and any claim for
patent, trademark or copyright infringement) or operation of any item of
the Equipment (by whomsoever used or operated); or
(3) the loss, damage, destruction, removal, return, surrender, sale or other
disposition of the Equipment, or any item thereof.
It is understood and agreed, however, that Lessor shall give Lessee prompt notice of any
claim or liability hereby indemnified against and that Lessee shall be entitled to control the
defense thereof, so long as Lessee is not in default hereunder.
11.2 Liability and Property Insurance
Lessee will self-insure any Schedule for Equipment valued at $100,000 or less. Lessee, at
its own expense, will provide commercial property insurance and liability insurance for any
Schedule for Equipment valued at more than $100,000. Equipment will be insured in an
amount sufficient to cover the actual cash value at the commencement of the Lease (as
determined by the purchase price paid by Lessee for the equipment) Lessee will provide
Lessor with proof of insurance upon request.
11.3 Damage to or Destruction of the Equipment
If all or any part of the Equipment is lost, stolen, destroyed, or damaged, Lessee will give
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Lessor prompt notice of such event and will repair or replace the same with equipment of
equal or greater value at Lessee's cost within sixty (60) days after such event, and any
replaced Equipment will be substituted in the Lease by appropriate endorsement. If
Lessee fails or refuses to make the required repair or replacement, Lessee will buy out the
individual piece of Equipment not repaired or replaced, at the next payment date (as set
forth in Exhibit B.) No loss, theft, destruction, or damage to the Equipment will impose any
obligation on Lessor under the Lease, and the Lease will continue in full force and effect
regardless of such loss, theft, destruction, or damage. Lessor does not assume any risk
and/or liability for loss, theft, destruction, or damage to the Equipment and for injuries or
deaths of persons and damage to property however arising, whether such injury or death
be with respect to agents or employees of Lessee or of third parties, and whether such
damage to property is to Lessee's property or to the property of others.
ARTICLE XII -- MISCELLANEOUS
12.1 Assignment and Sublease by Lessee
Lessee may not assign, transfer, pledge, or encumber this Agreement or any Lease or any
portion of the Equipment (or any interest in a Lease or the Equipment) or sublet the
Equipment, without the prior written consent of Lessor which consent shall not be
unreasonably withheld.
12.2 Assignment and Sublease by Lessor
Lessor may not assign, transfer, pledge, or encumber this Agreement or any Lease or any
interest in a Lease without the prior written consent of Lessee. Any such assignment
without the City’s written approval shall be considered null and void with no effect.
Immediately after receiving notice of such assignment or transfer, Lessee will then make
all payments directly to the assignee or transferee (as its interests may appear) and, within
thirty (30) days of such assignment or transfer, Lessee will acknowledge the same to the
assignee or transferee. Any payments made in accordance with such assignment or
transfer will relieve Lessee of all liability to Lessor for such payments. No such
assignment shall be effective against Lessee unless and until Lessee shall receive written
notice thereof from Lessor.
12.3 Lessor's Right to Perform for Lessee
If Lessee fails to make any payment or fails to satisfy any representation, covenant,
warranty, or obligation, Lessor may (but need not) make such payment or satisfy such
representation, covenant, warranty, or obligation, and the amount of such payment and
any expenses incurred by Lessor, if the case may be, will be deemed to be additional rent
payable by Lessee on Lessor's demand.
12.4 Addresses
All notices and payments under this Lease will be mailed or delivered,
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a) if to Lessee, City of Fort Collins, at 215 N Mason, 2nd Floor, P.O. Box 580, Fort
Collins, Colorado 80522 attention Purchasing Director with copy to the City
Attorney; and
b) if to Lessor, Pinnacle Public Finance, at 8377 E Hartford Drive, Suite 115,
Scottsdale, AZ 85255, attention Blair Swain, Senior Vice President, Direct
Markets.
until either Lessee or Lessor gives written notice to the other specifying a different
address.
12.5 Manner of Payment
All payments by Lessee will be made by check or by other manner acceptable to Lessor.
12.6 Nonwaiver
No breach by Lessee in the satisfaction of any representation, covenant, warranty, or
obligation may be waived except by the written consent of Lessor, and any such waiver
will not operate as a waiver of any subsequent breach.
12.7 Severance Clause
Any provision in this Agreement or in a Lease which is prohibited by law will be treated as
if it never were a part of this Agreement or such Lease, and the validity of the remaining
terms of this Agreement and the Lease will be unaffected.
12.8 Entire Agreement; Addendum
This Agreement, each Lease and the Exhibits thereto constitute the entire agreement
between Lessor and Lessee and supersede any prior agreement between Lessor and
Lessee with respect to the Equipment, except as is set forth in any Addendum which is
made a part of such Lease and which is signed by Lessor and Lessee.
12.9 Amendments
This Agreement and any Lease may be amended only by a written document signed by
Lessor and Lessee.
12.10 Inurement
Subject to the restrictions in Section 12.1 and 12.2, of this Agreement and each Lease are
binding upon and inure to the benefit of Lessor and Lessee and their respective
successors and assigns.
12.11 Governing Law and Venue
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This Agreement and each Lease shall be governed by the laws of the State of Colorado.
The venue for any judicial action arising under this Agreement shall only be in Larimer
County, Colorado in the District Court for the Eighth Judicial District.
12.12 Headings
Headings used in this Agreement are for convenience of reference only and the
interpretation of this Agreement will be governed by the text only.
12.13 Transmittal Fees
Transmittal of all documentation required for payment will be sent in an electronic format
acceptable to all parties from the Lessee to the Lessor and from the Lessor to the Escrow
Agent. Expedited overnight mail service may be substituted at the Lessor's expense.
PRINCIPALS:
By:
By:
Printed: Printed: Gerry Paul
Title: Title: Purchasing Director
Organization: Pinnacle Public Finance Inc. Organization: City of Fort Collins, Colorado
Address: 8377 E Hartford Drive, Suite 115 Address: PO Box 580
City, State, Zip: Scottsdale, AZ 85255 City, State, Zip: Fort Collins, CO 80522
ATTEST (LESSEE):
APPROVED AS TO FORM:
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
Managing Director/EVP
Cathy Jimenez
Senior Assistant City Attorney
City Clerk
Exhibit A - Sample
Schedule of Equipment No.
RE: MASTER LEASE-PURCHASE AGREEMENT entered into as of , 20 ,
("Agreement"), between PINNACLE PUBLIC FINANCE INC. ("Lessor") and the City of Fort
Collins, Colorado ("Lessee"). All terms used and not otherwise defined herein have the
meanings ascribed to them in the Agreement.
The following items of Equipment are hereby included under this Schedule to the Agreement:
Line
No.
Department Qty. Description Total Cost Term
(yrs)
2 5
3 5
4 5
5 5
6 5
7 5
Total 5-year Financing $
Total Lease Financing $
Lessee hereby represents, warrants and covenants that its representations, warranties and
covenants set forth in the Agreement are true and correct as though made on the
Commencement Date of Payments under this Schedule. The terms and provisions of the
Agreement (other than to the extent that they relate solely to other Schedules or
Equipment listed on other Schedules) are hereby incorporated into this Schedule by
reference and made a part hereof.
LESSOR: LESSEE:
By:
By:
Printed: Printed: Gerry Paul
Title: Title: Purchasing Direct
Organization: Pinnacle Public Finance Inc. Organization: City of Fort Collins, Colorado
Address: 8377 E Hartford Drive, Suite 115 Address: PO Box 580
City, State, Zip: Scottsdale, AZ 85255 City, State, Zip: Fort Collins, CO 80522
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
EXHIBIT B: Payment Schedule (Sample)
Interest rate % *
Term five (5) years.
Quarterly payments, in arrears
Pmt
No.
Due Date Payment
Amount
Interest
Portion
Principal
Portion
Principal
Balance
1
2
3
4
5
Amortization schedule supplied by Lessor must include the above information at a minimum,
plus a signature block for Lessee.
* The City of Fort Collins uses a five-year lease term with quarterly payments made in arrears for all
leases entered into under its master lease program. This lease structure results in leases with an
Average Life of 2.5 to 2.7 years. Average Life is a measurement of time when approximately 50%
of the original principal amount of the lease has been paid.
Below is the method Pinnacle used to set the rate on October 14, the date of the proposal.
Two (2) Year US Dollar Swap Rate: 1.064%*
Three (3) Year Dollar Swap Rate: 1.144%*
Average of the Swap Rates: 1.104% (Approximates a rate for the Average Life)
Required Spread to Average Swap Rates: 2.00% (200 basis points)
Resulting Rate by Adding Spread to Average: 3.104% (Taxable Rate of Interest)
Tax-Exempt Lease Rate: See Calculation Below
Lessor’s interest income is exempt from federal income tax so the Taxable Rate of Interest is
converted to the Tax-Exempt Lease Rate by the following calculation.
Tax Exempt Lease Rate = Taxable Rate X (100% minus the Bank United Corporate Tax Rate).
2.0176% = 3.104% (100%-35 %**)
2.0176% was rounded to 2.02%
* Pinnacle will provide the City with a copy of the screen printed from Bloomberg each time a rate is
set for a lease.
** Bank United's Tax Rate is currently 35%. If this rate is changed the new rate will be used in the
formula above.
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EXHIBIT C: Certificate of Acceptance and Concurrence (Samples)
FAX DOCUMENT
Certificate of Acceptance and Request for Payment
<DATE>
<COMPANY NAME>
Attn: <CONTACT NAME>
<ADDRESS>
<CITY, STATE, ZIP>
Dear <CONTACT NAME>:
The undersigned hereby certifies that he is duly qualified to act on behalf of the City of Fort
Collins, State of Colorado, with respect to Schedule of Equipment No. , dated ,
20 , to the Standard Master Lease Agreement dated , 20 , by and between the
City of Fort Collins, Lessee, and Pinnacle Finance, Lessor, and certifies that the following
equipment has been delivered to and accepted by Lessee:
Qty
Description
Invoice #
Amount
$
Enclosed is a copy of the purchase order # and invoice for the above items.
Please review the documents, sign the concurrence and fax them to our escrow agent, First
National Bank of Fort Collins for payment. Email the form to: cotrust-cdt@1stnationalbank.com
Thank you for your assistance. Should you have further questions, please contact Doug Clapp
at 970-221-6776.
Sincerely;
Gerry Paul
Purchasing Director
Enclosures
cc: Accounting
file
Financial Services
Purchasing Division
215 N. Mason St. 2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6775
970.221.6707- fax
fcgov.com/purchasing
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
Certificate of Acceptance and
Request for Payment
<DATE>
Ms. Cathy Schott
First National Wealth Management
PO Box 2010
Fort Collins, CO 80522
Re: Lease Purchase
Dear Ms. Schott:
In accordance with the terms of the escrow agreement between Pinnacle Public Finance and
the City of Fort Collins dated , 20 , (escrow account # ), you are hereby
authorized to disburse funds for:
Qty
Description
Invoice #
Amount
$
A copy of the acceptance certificate is attached. Please make remittance in the amount of
$ payable to:
Thank you for your assistance.
Sincerely;
Concurrence:
_________________________________
Gerry Paul
Purchasing Director
By: _______________________________
Title: ______________________________
Date: ____________________
cc: Accounting
file
Financial Services
Purchasing Division
215 N. Mason St. 2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6775
970.221.6707- fax
fcgov.com/purchasing
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
EXHIBIT D (sample)
ESCROW AGREEMENT AND INSTRUCTIONS
Schedule of Equipment No.
THIS AGREEMENT is made this day of 20 , by and between Pinnacle Public
Finance, Inc., as Lessor, and the City of Fort Collins, Colorado, as Lessee, hereinafter jointly
called the "Principals", and the First National Wealth Management, a division of First National
Bank of Omaha, P.O. Box 2010, Fort Collins, Colorado 80522, hereinafter called "Escrow
Agent".
The subject matter shown in Schedule A hereof has been delivered to Escrow Agent by
Principals, or with the consent of Principals, and is to be held by Escrow Agent subject to the
Special Instructions shown in Schedule B hereof, and the General Provisions hereof.
SCHEDULE A - SUBJECT MATTER*
A. An executed copy of Schedule of Equipment No. dated , 20 , and the
Master Lease-Purchase Agreement dated , 20 , between the Principals (jointly,
the "Lease") All exhibits to the Lease, except Exhibit C (Certificate of Acceptance), are
attached and executed. Executed copies of Exhibit C will be furnished to Escrow Agent
prior to disbursement of funds.
B. Funds in the amount of $ to be deposited with the Escrow Agent as directed by the
Lessee (“Escrow Account”), but not before and no later than .
*(Documents will be described as "originals" unless they are copies. If not so described, they
will be presumed to be copies. If subject matter is listed which is not delivered, all copies of the
Escrow Agreement and documents will be held a reasonable time [not exceeding thirty (30)
calendar days] pending delivery and a receipt will be given only for documents received. If all
documents are not received within a reasonable time, the documents will be returned to parties.
Only subject matter received at the time of execution will be listed above.)
SCHEDULE B - SPECIAL INSTRUCTIONS*
A. Escrow Agent will invest funds held in the Escrow Account at the direction of Lessee in a
Money Market Fund or such other fund as agreed to by Lessee.
B. Escrow Agent will promptly deposit all earnings from such investments in the Escrow Fund
created hereunder.
C. Funds deposited with the Escrow Agent shall be used to pay for the cost of acquisition of
items of equipment listed on Exhibit A to the Lease. Escrow Agent shall make payment for
each piece of leased equipment only upon receipt of both an executed copy of the
appropriate Exhibit C of the Lease and a letter of disbursement authorization signed by both
Principals (Lessor and Lessee).
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D. Provide to Lessor and Lessee on a monthly basis, for the term of this Escrow Agreement,
reports indicating the following:
- Amount of disbursements for the purchase of investments.
- Amount of disbursements for the payment of invoices.
- Amount of principal and interest received from investments.
- An inventory of outstanding investments.
*(Any notice which Escrow Agent is required to give must be specifically set out in these Special
Instructions.)
GENERAL PROVISIONS
1. The Escrow Agent shall have no duty to determine the performance or nonperformance of
any provision of any agreement between the other parties hereto, and the original, or a
copy, of any such agreement deposited with the Escrow Agent shall not bind said agent in
any manner. The Escrow Agent assumes no responsibility for the validity or sufficiency of
any documents or papers or payments deposited or called for hereunder except as may be
expressly and specifically set forth in these instructions in clear and unambiguous language.
2. This Agreement may be supplemented, altered, amended, modified or revoked by writing
only, signed by all of the parties hereto, and approved by the Escrow Agent, upon payment
of all fees, costs and expenses incident thereto.
3. No assignment, transfer, conveyance or hypothecation of any right, title or interest in and to
the subject matter of this Escrow shall be binding upon the Escrow Agent unless written
notice thereof shall be served upon the Escrow Agent and all fees, costs and expenses
incident thereto shall have been paid and then only upon the Escrow Agent's assent thereto
in writing.
4. Any notice required or desired to be given by the Escrow Agent to any party to this Escrow
may be given by mailing the same addressed to such party at the address noted herein, or
the most recent address of such party shown on the records of the Escrow Agent, or
believed by Escrow Agent to be proper, and notice so mailed shall be as effectual as though
served upon such party in person at the time of depositing such notice in the mail.
5. The Escrow Agent may receive any payment or performance called for hereunder after the
due date thereof unless subsequent to the due date of such payment or performance and
prior to the receipt thereof the Escrow Agent shall have been instructed in writing by the
proper parties to refuse any such payment.
6. The Escrow Agent shall not be personally liable for any act it may do or omit to do
hereunder as such agent, while acting in good faith and in the exercise of its own best
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judgment, and any act done or omitted by it pursuant to the advice of its own attorneys shall
be conclusive evidence of such good faith. The Escrow Agent shall have the right at any
time to consult with counsel upon any question arising hereunder and shall incur no liability
for any delay reasonably required to obtain the advice of counsel.
7. The Escrow Agent is hereby expressly authorized to disregard any and all notices or
warnings given by any of the parties hereto, or by any other person, firm or corporation,
excepting only orders or process of court, and is hereby expressly authorized to comply with
and obey any and all process, orders, judgments or decrees of any court, and in case the
Escrow Agent obeys or complies with any such process, order, judgment or decree of any
court it shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such process, order,
judgment or decree by subsequently reversed, modified, annulled, set aside or vacated, or
found to have been issued or entered without jurisdiction.
8. In consideration of the acceptance of this escrow by the Escrow Agent, the Lessee agrees,
to pay the Escrow Agent its charges and fees hereunder, if any, and to indemnify and hold it
harmless as to any liability by it incurred to any other person, firm or corporation by reason
of its having accepted the same, or in connection herewith, and under such circumstance, or
in the event of a dispute, whether or not resulting in litigation, between the parties hereto, or
between the parties hereto and the Escrow Agent, to reimburse the Escrow Agent for all its
expenses, including, among other things, court costs and reasonable attorneys' fees
incurred in connection therewith. Escrow fees or charges, as distinguished from other
expenses hereunder, shall be as set forth in paragraph 16, and are intended as
compensation for the Escrow Agent's ordinary services as contemplated by these
Instructions. In the event the conditions of this escrow are not promptly fulfilled or any
dispute arises hereunder, or if for any other reason, the Escrow Agent renders services not
provided for in these Instructions, Lessee agrees to pay reasonable compensation for such
extraordinary services. In the event of any action to recover the Escrow Agent's fees,
expenses or charges, the Escrow Agent shall be entitled to reasonable attorneys' fees and
costs incurred with respect to any such action. No provision in any attached special
instructions shall alter Lessee’s liability to the Escrow Agent for such fees, charges and
expenses. The Principals shall not be liable for gross negligence or intentional acts of the
Escrow Agent.
9. The Escrow Agent shall be under no duty or obligation to ascertain the identity, authority or
rights of the parties (or their agents) executing or delivering or purporting to execute or
deliver these instructions or any documents or papers or payments deposited or called for
hereunder.
10. The Escrow Agent shall not be liable for the outlawing of any rights under any statute of
limitations or by reason of laches in respect to the Instructions or any documents or papers
deposited.
11. In the event of any dispute between the parties hereto as to the facts of default or execution,
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the validity or meaning of these instructions or any other fact or matter relating to the
transaction between the parties, the Escrow Agent is instructed as follows:
(a) That it shall be under no obligation to act, except under process or order of court, or until
it has been adequately indemnified to its full satisfaction, and shall sustain no liability for
its failure to act pending such process or court or indemnification:
(b) That it may in its sole and absolute discretion deposit the property described herein or so
much hereof as remains in its hands with the then Clerk, or acting Clerk, of the District
Court of the County of Larimer, State of Colorado, and interplead the parties hereto, and
upon depositing such property and filing its complaint in interpleader it shall be relieved
of all liability under the terms hereof as to the property so deposited and shall be entitled
to recover in such interpleader action, from the other parties hereto, its reasonable
attorney fees and related costs and expenses incurred in commencing such action and
furthermore, the parties hereto for themselves, their heirs, legal representatives,
successors and assigns do hereby submit themselves to the jurisdiction of said court
and do hereby appoint the then Clerk, or acting Clerk, of said court as their Agent for the
Service of all process in connection with such proceedings. The institution of any such
interpleader action shall not impair the rights of Escrow Agent under paragraph
numbered 8, above.
12. This Escrow will expire on or before . If the deposits hereunder are not withdrawn or
this Escrow terminated before that date Escrow Agent may mail the Subject Matter as
follows, for use only for payment of principal or interest under the Lease or for the purchase
of equipment for Lessee’s own use, and upon such mailing, the Escrow Agent shall be
relieved from further responsibility or liability.
CITY OF FORT COLLINS
Purchasing Director
P.O. Box 580
Fort Collins, Colorado 80522
13. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
14. The Escrow Agent may resign by giving notice in writing to all parties of its intent to resign.
The resignation shall become effective no sooner than sixty (60) days from the date of
mailing of the notice. The notice will be sent certified mail with return receipt requested to
the addresses set forth in paragraph 18 below unless these addresses have been changed.
The Principals shall advise the Escrow Agent in writing of the name of the new Escrow
Agent. If the Principals cannot agree as to the new Escrow Agent, or fail to advise the
Escrow Agent within the time set forth, the Escrow Agent may treat this as a dispute and
proceed under paragraph 11 above. If the new Escrow Agent is designated, then upon
delivery of all documents to the new Escrow Agent, the Escrow Agent is relieved of all
further responsibility or liability.
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
15. Other provisions:
(a) This agreement shall be construed and governed in accordance with the laws of the
State of Colorado.
(b) Any provisions of this Agreement found to be prohibited by law shall be ineffective only
to the extent of such prohibition, and shall not invalidate the remainder of this
Agreement.
(c) This Agreement (and, with respect to Lessor and Lessee, together with the Lease)
constitutes the entire agreement of the parties relating to the subject matter hereof.
16. The fees to be paid Escrow Agent shall be paid by the Principals as follows:
No fees will be charged by Escrow Agent for maintenance of this Escrow Agreement.
17. Lessee and Lessor agree that Lessor shall have a security interest in the Escrow Account,
and such security interest is hereby granted by the Lessee to secure payment of all sums
due to the Lessor under the Lease. For such purpose, the Escrow Agent hereby agrees to
act as agent for the Lessor in connection with the perfection of such security interest and
agrees to note, or cause to be noted, on all books and records relating to the Escrow
Account, the Lessor’s interest therein.
18. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
PRINCIPALS:
By:
By:
Printed: Printed: Gerry Paul
Title: Title: Purchasing Direct
Organization: Pinnacle Public Finance, Inc. Organization: City of Fort Collins, Colorado
Address: 8377 E. Hartford Drive, Suite 115 Address: PO Box 580
City, State, Zip: Scottsdale, Arizona 85255 City, State, Zip: Fort Collins, CO 80522
ESCROW AGENT:
By:
Printed:
Title:
Organization: First National Wealth Management
A division of First National Bank of Omaha
Address: PO Box 2010
City, State, Zip: Fort Collins, Co 80522
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
EXHIBIT E
ESCROW AGREEMENT FOR MOTOR VEHICLE CERTIFICATES OF TITLE
This Escrow Agreement for Motor Vehicle Certificates of Title (this “Escrow Agreement”) is
made and entered into this 1st day of February, 2017, (“Effective Date”) by and between
Pinnacle Public Finance, Inc. (the “Lessor”); the City of Fort Collins, Colorado, a home rule
municipality (the “Lessee”); and First National Wealth Management, a division of First National
Bank of Omaha (the “Escrow Agent”). The Lessor and Lessee shall hereinafter be referred to
jointly as “the Principals.” The Principals and the Escrow Agent shall hereinafter be referred to
collectively as “the Parties.”
RECITALS
WHEREAS, the Lessor and Lessee have previously entered into that certain “Master
Lease-Purchase Agreement” dated February 1, 2017 (the “Agreement”); and
WHEREAS, under the Agreement, the Lessor leases to the Lessee certain “Equipment”
as identified in Section 1.1 of the Agreement and as further described in “Schedules of
Equipment” as agreed to by the Lessor and Lessee from time-to-time; and
WHEREAS, the Equipment described in the Schedules of Equipment include motor
vehicles being leased by the Lessor to the Lessee (the “Motor Vehicles”); and
WHEREAS, Article V. of the Agreement grants to the Lessee the option to
purchase from the Lessor any or all of the Equipment, including the Motor Vehicles, in
accordance with the provisions of Article V. of the Agreement; and
WHEREAS, Sections 1.3, 2.4, and 3.2 of the Agreement expressly provide that all of the
Lessee’s obligations under the Agreement are subject to annual appropriation by the
Lessee’s City Council (the “Council”) for the funds needed to meet those obligations, which
appropriation is entirely within the Council’s sole discretion; and
WHEREAS, Section 3.2 of the Agreement provides that if the Council has not
appropriated the needed funds and the Lessee has not otherwise exercised its option to
purchase the Equipment, the Lessor is entitled to take possession of such Equipment; and
WHEREAS, consistent with the lease-purchase nature of each Lease, Section 1.2 of the
Agreement provides that during its term, naked legal title to the Equipment will be in the Lessor
subject to any transfer of that title upon the Lessee’s exercise of its option to purchase any or all
of the Equipment as provided in Article V. of the Agreement; and
WHEREAS, notwithstanding this statement in Section 1.2 of the Agreement that the
Lessor holds naked legal title to the Equipment, Section 1.2 also states: “Lessor and Lessee
further agree that the Lessee shall be listed as “Owner” on vehicle titles and shall be treated as
the owner for all purposes stated therein”; and
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WHEREAS, notwithstanding the foregoing, the Lessee and Lessor have acknowledged
and agreed in Section 1.2 of the Agreement that the intent of this motor-vehicle-title language in
Section 1.2 is for the purposes of establishing ownership of the Equipment for federal tax
purposes and to reduce the likelihood of the Lessor’s liability for any civil claims that might arise
from the Lessee’s use of the leased Motor Vehicles, and it is also more convenient
administratively for the Lessee in perfecting clear title to such Motor Vehicles when the Lessee
does exercise its option under the Agreement to purchase any or all the Motor Vehicles and, in
so doing, not to diminish in anyway the lease-purchase nature of the Agreement or the
Principals’ intent that the Lessor continue to hold naked legal title to all of the leased Motor
Vehicles until the Lessee has exercised its option to purchase them; and
WHEREAS, in further support of these clarifications, the Lessor and Lessee agreed in
Section 1.4 of the Agreement to enter into this Escrow Agreement to establish a process by
which the State of Colorado Certificate of Title for each of the Motor Vehicles that are now being
and will be leased under the Agreement, an example of such a Certificate of Title is attached
hereto as Exhibit “A”, (“Certificates of Title”) will be delivered to the possession of the Escrow
Agent and hereafter administered by the Escrow Agent in accordance with the terms and
conditions of this Escrow Agreement; and
WHEREAS, the Escrow Agent has agreed to take possession of the Certificates of Title
and to administer them in accordance with the terms and conditions of this Escrow Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
Parties contained in this Escrow Agreement and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties agree to the following
terms and conditions of this Escrow Agreement.
AGREEMENT
1. Certificates of Title. The Principals agree to promptly deliver to the Escrow Agent the
originals of all the Certificates of Title coming into their possession after the Effective Date
relating to all leases of Motor Vehicles under the Agreement. The Escrow Agent agrees to
accept possession of these Certificates of Title and to safely keep and maintain them until
required to deliver them to the Lessor as provided in Section 3 below or to deliver them to
the Lessee as provided in Section 4 below.
2. Powers of Attorney. The Lessee shall promptly deliver to the Escrow Agent the Lessee’s
original and executed “State of Colorado Power of Attorney for Motor Vehicle Only,” the form
for which is attached as Exhibit “B”, for each of the current Certificates of Title delivered to
the Escrow Agent as required in Section 1 above (“Powers of Attorney”). Each Power of
Attorney shall be completed and executed by the Lessee to appoint the Escrow Agent as
the Lessee’s agent to complete and execute the assignment section of the corresponding
Certificate of Title when the Escrow Agent is required to assign and deliver the Certificate of
Title to the Lessor as provided in Section 3 below.
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3. Assignment and Delivery of Certificate of Title to Lessor. In the event the Lessee notifies
the Lessor in writing under Section 3.2 of the Agreement of a non-appropriation by the
Lessee’s Council for the lease payments for any of the Motor Vehicles, the Lessee shall
provide that same written notice to the Escrow Agent and in that notice shall specify by
vehicle identification number the Motor Vehicles for which a non-appropriation has occurred.
Upon receiving such notice, the Escrow Agent is authorized and directed to complete and
execute the assignment section of the Certificate of Title for each such Motor Vehicle in
order to assign that Certificate of Title to the Lessor. The Escrow Agent shall deliver the
original of the assigned Certificate of Title, together with its corresponding original Power of
Attorney, to the Lessor within fourteen (14) days after receiving the Lessee’s said written
notice.
The Lessee shall also provide the Escrow Agent with written notice at the end of the Lease
Term for each Motor Vehicle when the Lessee has elected not to exercise its option to
purchase under Article V. of the Agreement, which notice shall include the vehicle
identification number for each such Motor Vehicle not purchase by the Lessee at the end of
its Lease Term. Upon receiving such notice, the Escrow Agent is authorized and directed
to complete and execute the assignment section of the Certificate of Title for each such
Motor Vehicle in order to assign that Certificate of Title to the Lessor. The Escrow Agent
shall deliver the original of the assigned Certificate of Title, together with its corresponding
original Power of Attorney, to the Lessor within fourteen (14) days after receiving the
Lessee’s said notice.
4. Deliver of Certificate of Title to Lessee. In the event the Lessee exercises its option under
Article V. of the Agreement to purchase any of the Motor Vehicles, the Lessee must provide
the Escrow Agent with a copy of its notice of election the Lessee has provided to the Lessor
as required in Section 5.2 of the Agreement. That notice shall include the vehicle
identification numbers for each Motor Vehicle to be purchased. Within ten (10) days after
the Lessee has made all rental payments to the Lessor for the purchase of those identified
Motor Vehicles, as required in Section 5.3 of the Agreement, the Lessor shall, within ten (10)
days of such payment, provide the Escrow Agent and the Lessee with written confirmation
that the Lessee has satisfied all its payment requirements under Section 5.3 for the
purchase of the identified Motor Vehicles. Within five (5) days of receiving such notice from
the Lessor, the Escrow Agent is authorized and directed to deliver to the Lessee the original
Certificate of Title for each Motor Vehicle together with the original, corresponding Power of
Attorney.
5. Payment for Escrow Services. The Lessee shall be responsible for the payment of all fees
charged by the Escrow Agent for its services under this Escrow Agreement and agrees to
indemnify the Lessor for all such fees. The Lessee shall pay the Escrow Agent $4,000 each
year for its services under this Escrow Agreement within thirty (30) days of being billed. The
Escrow Agent reserves the right to change its services and fees hereunder after first giving
the Lessor and Lessee thirty (30) days prior written notice. If either the Lessor or Lessee
object to any such change in services or fees, they shall each have thirty (30) days after
receiving the Escrow Agent’s notice in which to terminate this Agreement by sending written
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
notice of such termination to the other Parties.
6. Principals’ Agreements. The Escrow Agent shall have no duty to determine the performance
or nonperformance of any provision of any agreement between the Principals, including,
without limitation, the Agreement and the original, or a copy, of any such agreement
deposited with the Escrow Agent shall not bind the Escrow Agent in any manner. The
Escrow Agent assumes no responsibility for the validity or sufficiency of any documents or
papers or payments deposited or called for hereunder except as may be expressly and
specifically set forth in this Escrow Agreement in clear and unambiguous language.
7. Amendments. This Escrow Agreement may be supplemented, altered, amended, modified
or revoked by writing only, signed by the Principals, and approved by the Escrow Agent,
upon payment of all fees, costs and expenses incident thereto.
8. Assignments. No assignment, transfer, conveyance or hypothecation of any right, title or
interest in and to this Escrow Agreement or the subject matter of this Escrow Agreement
shall be binding upon the Escrow Agent unless written notice thereof shall be served upon
the Escrow Agent and all fees, costs and expenses incident thereto shall have been paid
and then only upon the Escrow Agent's assent thereto in writing.
9. Notice. Notices required or permitted to be given under this Escrow Agreement shall be in
writing and shall be deemed given upon personal delivery or upon deposit in the United
States Mail, certified mail, return receipt requested, postage fully prepaid, address as follows
or to such other address as any of the Parties may designate from time to time by notice to
the other Parties given in accordance with this Section:
To Lessee: Gerry Paul
City of Fort Collins
P.O. Box 580
Fort Collins, CO 80522
With a copy to: Fort Collins City Attorney’s Office
P.O. Box 580
Fort Collins, CO 80522
To Escrow Agent: First National Bank
Attn: Cathy L. Schott, Director, Private Client Services
P.O. Box 2010
Fort Collins, CO 80522
10. Disclaimer of Liability. The Escrow Agent shall not be personally liable for any act it may do
or omit to do hereunder as such agent, while acting in good faith and in the exercise of its
own best judgment, and any act done or omitted by it pursuant to the advice of its own
attorneys shall be conclusive evidence of such good faith. The Escrow Agent shall have the
right at any time to consult with counsel upon any question arising hereunder and shall incur
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
no liability for any delay reasonably required to obtain the advice of counsel.
11. Warnings or Court Orders. The Escrow Agent is hereby expressly authorized to disregard
any and all notices or warnings given by either of the Principals, or by any other person, firm
or corporation, excepting only orders or process of court, and is hereby expressly
authorized to comply with and obey any and all process, orders, judgments or decrees of
any court, and in case the Escrow Agent obeys or complies with any such process, order,
judgment or decree of any court, it shall not be liable to either of the Principals or to any
other person, firm or corporation by reason of such compliance, notwithstanding any such
process, order, judgment or decree by subsequently reversed, modified, annulled, set aside
or vacated, or found to have been issued or entered without jurisdiction.
12. Indemnification. In consideration of the acceptance of this escrow by the Escrow Agent, the
Lessee agrees to pay the Escrow Agent its charges and fees hereunder, and to
indemnify and hold it harmless as to any liability by it incurred to any other person, firm or
corporation by reason of its having accepted the same, or in connection herewith, and under
such circumstance, or in the event of a dispute, whether or not resulting in litigation,
between the Principals, or between the Principals and the Escrow Agent, to reimburse the
Escrow Agent for all its expenses, including, among other things, court costs and
reasonable attorneys' fees incurred in connection therewith. Escrow fees or charges, as
distinguished from other expenses hereunder, shall be as set forth in paragraph 5 above,
and are intended as compensation for the Escrow Agent's ordinary services as
contemplated by this Escrow Agreement. In the event the conditions of this Escrow
Agreement are not promptly fulfilled or any dispute arises hereunder, or if for any other
reason, the Escrow Agent renders services not provided for in this Escrow Agreement,
Lessee agrees to pay reasonable compensation for such extraordinary services. In the
event of any action to recover the Escrow Agent's fees, expenses or charges, the Escrow
Agent shall be entitled to reasonable attorneys' fees and costs incurred with respect to any
such action. No provision in any attached special instructions shall alter Lessee’s liability to
the Escrow Agent for such fees, charges and expenses. The Principals shall not be liable
for gross negligence or intentional acts of the Escrow Agent.
13. No Duty to Ascertain Identity or Authority. The Escrow Agent shall be under no duty or
obligation to ascertain the identity, authority or rights of the Principals (or their agents)
executing or delivering or purporting to execute or deliver this Escrow Agreement or any
documents or papers or payments deposited or called for hereunder, including, without
limitation, the Certificate of Title and the Powers of Attorney.
14. Statute of Limitations and Laches. The Escrow Agent shall not be liable for the outlawing of
any rights under any statute of limitations or by reason of laches in respect to this Escrow
Agreement or any documents or papers deposited hereunder.
15. Interpleader Action. In the event of any dispute between the Parties as to the facts of default
or execution, the validity or meaning of this Escrow Agreement or any other fact or matter
relating to the transaction between the Parties, the Escrow Agent is instructed as follows:
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(a) That it shall be under no obligation to act, except under process or order of court, or until
it has been adequately indemnified to its full satisfaction, and shall sustain no liability for
its failure to act pending such process or court or indemnification; and
(b) That it may in its sole and absolute discretion deposit the Certificates of Title and
corresponding Powers of Attorney described herein, or so much thereof as remains in its
hands, with the then Clerk, or acting Clerk, of the District Court of the County of Larimer,
State of Colorado, and interplead the Principals, and upon depositing such property and
filing its complaint in interpleader it shall be relieved of all liability under the terms hereof
as to the property so deposited and shall be entitled to recover in such interpleader
action, from the Principals, its reasonable attorney fees and related costs and expenses
incurred in commencing such action and furthermore, the Principals for themselves, their
heirs, legal representatives, successors and assigns do hereby submit themselves to the
jurisdiction of said court and do hereby appoint the then Clerk, or acting Clerk, of said
court as their Agent for the Service of all process in connection with such proceedings.
The institution of any such interpleader action shall not impair the rights of Escrow Agent
under paragraph numbered 6, 10, 11, 13, and 14, above.
16. Term and Termination. The term of this Escrow Agreement commences upon the Effective
Date and shall continue until the Agreement terminates pursuant to its terms and conditions,
unless this Escrow Agreement is terminated sooner as provided elsewhere herein. If the
Certificates of Title and Powers of Attorney deposited hereunder are not withdrawn or this
Escrow Agreement otherwise terminates before the date the Agreement terminates, the
Escrow Agent shall mail the Certificates of Title and Powers of Attorney remaining in its
possession as follows, and upon such mailing, the Escrow Agent shall be relieved from
further responsibility or liability.
CITY OF FORT COLLINS
Purchasing Director
P.O. Box 580
Fort Collins, Colorado 80522
17. Binding Effect. This Escrow Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns.
18. Resignation of Escrow Agent. The Escrow Agent may resign by giving notice in writing to
the Principals of its intent to resign. The resignation shall become effective no sooner than
sixty (60) days from the date of mailing of the notice. The notice will be sent certified mail
with return receipt requested to the addresses set forth in paragraph 9 above unless these
addresses have been changed. The Principals shall advise the Escrow Agent in writing of
the name of the new Escrow Agent. If the Principals cannot agree as to the new Escrow
Agent, or fail to advise the Escrow Agent within the time set forth, the Escrow Agent may
treat this as a dispute and proceed under paragraph 15 above. If the new Escrow Agent is
designated, then upon delivery of all documents to the new Escrow Agent, the Escrow
Agent is relieved of all further responsibility or liability hereunder.
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
19. Governing Law. This Escrow Agreement shall be construed and governed in accordance
with the laws of the State of Colorado.
20. Severability. Any provisions of this Escrow Agreement found to be prohibited by law shall
be ineffective only to the extent of such prohibition, and shall not invalidate the
remainder of this Escrow Agreement.
21. Entire Agreement. This Escrow Agreement (and, with respect to Lessor and Lessee, the
Agreement and First Amendment) constitutes the entire agreement of the Parties relating to
the subject matter hereof.
PRINCIPALS:
By:
By:
Printed: Printed: Gerry Paul
Title: Title: Purchasing Direct
Organization: Pinnacle Public Finance, Inc. Organization: City of Fort Collins, Colorado
Address: 8377 E. Hartford Drive, Suite 115 Address: PO Box 580
City, State, Zip: Scottsdale, Arizona 85255 City, State, Zip: Fort Collins, CO 80522
ATTEST (LESSEE):
APPROVED AS TO FORM:
ESCROW AGENT:
By:
Printed:
Title:
Organization: First National Wealth Management
A division of First National Bank of Omaha
Address: PO Box 2010
City, State, Zip: Fort Collins, Co 80522
DocuSign Envelope ID: 6F383901-9245-4429-9277-15E5CE2AFECC
Cathy Jimenez
Managing Director/EVP
Senior Assistant City Attorney
City Clerk
Cathy Schott
Director, Private Client Services